The Limits of Diplomacy

Presentation at Folke Bernadotte Academy

Stockholm, October 2003

Note: transcript of an unscripted presentation

The typical Western leader or typical western bureaucrat – as represented by us – tends to want three things.

He or she wants policies which are short-term, quick wins. Policies which give predictable results – no point in a policy which gives unpredictable results. And a policy which gives positive results. The instinct is for positive, short-term, predictable results.

What you sometimes get are negative, long-term, unexpected, results. And these things compound up. A so-called mature peace process is a situation where you have the benefit of quick wins and good things compounded up over 6, 7, 8 years, plus the disadvantage of stupidity and mistakes which have compounded up over 6 or 7 years.

Listen to that last speech: “More should have been done earlier to work towards a roadmap for a transition to a market economy.” We are saying this 8 years after Dayton? We must have a market economy in Bosnia, and we did not do enough? This is extraordinarily depressing! It is a strategic failure. I was there, I am part of it, I admit it. We did not get it right.

Perhaps I am not allowed to say this in Sweden or anywhere else for that matter – we have a ‘socialist’ vision of what interventions are all about. They are driven by governments, they are paternalistic, top-down, all about rules, about “we know best”. Look at this conference; there isn’t a single business person here! I haven’t been to a Balkan conference with a single businessman. People say: “Oh, it would be nice to hear what a businessman thinks” as if it was some kind of “optional extra”.

We are trying to build a market economy, and a country that works. That isn’t just a state plus government. It is the informal institutions which work away from government and despite government. So we don’t focus enough on the market side.

Here’s a couple of conclusions which I think humbly, actually not very humbly, apply to all international interventions. We talk all the time about our money, we don’t talk about their money. Take Bosnia – a poor country. Let’s say average expenditure per day per person: 5 USD.

Not very much? Yet 5 x 4 million x 365 days gives the amount of money spent in that country every year, about 8 billion USD, mostly in cash. This means that 8 years after Dayton that economy has spent 64 billion USD. But our assistance is, say, 5 billion USD.

And what are they spending their 5 USD a day on? They are spending it on alcohol, cigarettes, mobile phones, petrol, a bit on food and electricity bills and rent. So that is what the economy is. If you don’t focus on getting that under control, you are wasting your time.

And the people who control that money, the person who controls the cigarette outlets in Bosnia or the mobile phone franchise in Bosnia or Kosovo or East Timor doesn’t buy a judge. He buys the legal system, because a judge is paid about 200 USD a month. One truck load of cigarettes on the Kosovo-Montenegro border: quarter of a million dollars! Four of those lorries go through: a million dollars.

Our customs fellow went down there a few months ago and found 9 empty lorries with false compartments. They had been tipped off, probably by a Montenegrin government official, that this expert was coming. There is 1.5 million dollars, on that day, just like that. That is a lot more than our bilateral aid programme to Montenegro in a year.

This is what we are dealing with. You have got to get their money under control. That is really what the corruption issue is all about – a subset of the wider issue of trying to stabilize what economic spending really is in these miserable spaces.

It is encouraging at last that people are realizing the role of the courts. You can’t have business or police without courts. We spent a huge effort when I was in Bosnia on the multi-ethnic police, but no one talked about the mono-ethnic court system! So you arrest people and put them into an unfair system. I have worked in Russia and other transition places.

A strategic mistake by Western governments has been to underplay the role of judges in the courts. And the sums involved are tiny! You don’t have to pay judges much money. In somewhere like Bosnia, 10,000 USD a year for senior judges would help give them a personal incentive not to take bribes. But if they take bribes from the people controlling not tens of millions of dollars, but hundreds of millions of dollars, the whole of society remains skewed right from the start.

And the failure to get this right has led to some spectacular results. Eight years after Dayton Bosnia’s economy is in a pretty rotten shape. And look what is happening in Kosovo. We tried to give Kosovo electricity. We have spent hundreds of millions of dollars trying to give Kosovo electricity. They haven’t got it yet properly.

People talk about the regional approaches in these things. I talk to Bosnians who say: “We built those Kosovo power stations? Why aren’t they coming to us to tell them how to fix them?” Why is it that the High Rep from Bosnia doesn’t much meet the High Reps from Kosovo or Macedonia regularly so that they can say: “How does all this work? How do we get under the skin of these issues and get value-added from our interventions?”

So that is one big thought: Get control of their money and worry less about ours.

Second point. Take out the poison.

Mr Ivanic said: “How can you build peace with the people who made the war?” Everyone talks about the Bonn powers as if it was such a great idea.

If I may say so, we are all touched by Mr Holbrooke’s concern for Europeans. But Dayton was written so that the only European position agreed at Dayton, namely the High Representative, had no power. The people who had the power were the head of the OSCE (American) and the head of the NATO force (American). In these circumstances you could not use the civilian mandate to get rid of obstructive people right at the start. The Bonn powers came significantly later.

The time to sack obstructive people is not 8 years after Dayton; it is 8 weeks after Dayton, to make a new start. If you don’t frontload for success, which involves in the early days a lot of sensitive coordination between military and civilian, because the civilian presence tends to be relatively weak at the start and the military presence is very strong, you get off to a bad start. The consequences, as I said at the beginning, compound up.

The war crimes issue is all to do with that. ICTY has helped take some of the most poisonous elements out of the system. The Balkans is like a horse. It staggered out of a war and a horrible jungle full of poisoned arrows, and what we are doing slowly but surely is taking the poisoned arrows out of the horse. But the horse has still got a lot of poison in the system. Unless you focus on getting that poison out of the system, it does not matter how many consultants you have – the horse isn’t going to gallop far or in the right direction.

Consistency – next big point. Mr Ivanic talked about consistency. It is very hard to be consistent. Dick Holbrooke said: “Look at Bosnia, we’ve got a political goal. Look at Kosovo, we haven’t got a political goal.”

On one level he is right. Bosnia is a plan without a civilian mandate and Kosovo is civilian mandate without a plan. And if we are talking about learning lessons, how did we get in that situation when one problem came so close after the other?

But on another level, is he right? What we are really saying in Bosnia is: “You people really don’t like each other but you have to live together in this framework whether you like it or not. Shut up. Get on with it.” And we are saying to Kosovo: “You people don’t like each other, it is OK to divorce.” In Macedonia we are on the former approach.

This isn’t very consistent. This is one former country; leaders need us to show a common sense level of consistency which they can explain to their electors. We want democracy in the Balkans but we don’t like it when people respond to the prejudices and fears of their electorates. Our politicians respond to the prejudices and fears of our electorates. Why not them too?

Again, Dick Holbrooke said: “Returns, look at returns. We have done very well in Bosnia; look at the great record on returns.” Well, in Bosnia we made returns a centre of our policy. In Kosovo we didn’t. Mr Haekkerup came up to Belgrade – some 8 months after Milosevic fell – for his first visit. We sat there in Michael Sahlin’s house and we asked him about his policy on DP’s, internally displaced people. He said: “They are not my constituency.” Serbs from Kosovo, nothing to do with him?

You get what you pay for in all this. Mr Holbrooke says “we can’t have all these Serbs coming back from Kosovo, brought there by Milosevic”. But he didn’t talk about all the many Albanians who over the years have crossed into Kosovo from Albania who have also asserted the right to be there. So you send a signal of deep unfairness by making one point but not balancing it. This makes people less cooperative among themselves and less willing to trust the international community.

Look at Europe. Europe is full of weird little experiments designed to stop us fighting each other: arrangements for devolution, cantons in Switzerland, principalities and bits and bobs. But Mr Covic in Belgrade gets up and says: “What about cantons for Kosovo?” He was slapped down by the international community because he used the word canton: “That’s mono-ethnic, we can’t have that.”

And then he said: “What about entities, is that a bad idea?” And the reply with some Americans in the lead is: “Entities have been a disaster in Bosnia”.

And then we hear Mr Holbrooke saying what great success entities were in Bosnia. It seems to me they are quite successful in Bosnia because they give some sort of territorial sense of security as part of a wider deal. But they were ruled out for Kosovo because of some sort of political correctness which no one ever honestly articulates.

This will come out in the wash, because once you start having a Kosovo-Serb dialogue these ideas will be put on the table and we’re going to have to think about rummaging around in the bran tub of European ideas to find some constitutional ideas which will work.

This conference is about learning lessons. If we identified any lessons here, and we probably identified a few, what is the mechanism for getting them learnt? I’ll tell you what the mechanism is in most Foreign Offices – there isn’t one! We’re just not very good at it.

One of the reasons – this is a controversial view – is that the mass of senior policy makers in the world have never worked in a troubled situation on the ground. They are very good at setting the rules; they are not very good at implementing them. And therefore we don’t have senior mechanisms for, in an institutional sense, learning practical lessons and then applying them.

One of the things this institute can do is really look at the issue of how you should identify lessons. How do you get them fed into the system? So the next time a crisis comes up in Africa, you call on a body of expertise saying: “Right, get the cigarettes and the petrol under control.” No-brainer things to stop the runaway stagecoach.

This does not happen. The Balkan crowd, amply represented here, is not the same as the Congo crowd or the East Timor crowd. We don’t cross-fertilize enough and it’s a great shame.

The final thought. I think the European vision is working despite all the problems. I didn’t agree with Misha Glenny last night when he said the Balkans are sitting there watching the European train go by. Europe does work. People are calming down, looking for a European future in this region.

Michael Steiner had some good points on this one. Namely, how do you harness the European agenda with a constitutional settlement for Kosovo? Is there really no way we can say on the Kosovo process: “It is going to take a long time and we’re going to work this out as part of European accession.” and put it into that channel?

But if we are going to do that, we need to be more nimble. I think that is my very final thought. Why does the EU work? It works because we are polite to each other at the highest level. But that makes us inefficient in foreign policy where you sometimes you have to be tough. If people are literally shooting at our policy, do we shoot back or do we have a meeting about it?

When you listen to Dick Holbrooke you get a sense of power. And Foreign Minister Svilanovic said to me the other day just before I left Belgrade: “You Europeans … the Americans are much better because they offer us a deal.” The EU is bad at offering deals – we don’t like that sort of thing. We like deals to schmooze out in a rather mysterious way. It doesn’t work that way in Foreign Policy.

If we can offer these countries a clear, credible meaningful vision of EU membership in some sort of time that means something, they will calm down fairly quickly.

But in the meantime we have to face deep issues of personal security for millions of people, about who lives where and why. And we’re not yet fully on top of those.